Hesser and Packard (Child support)

[2018] AATA 4599

Hesser and Packard (Child support) [2018] AATA 4599 (30 October 2018)

DIVISION:Social Services & Child Support Division

REVIEW NUMBER:  2018/AC013841 and 2018/AC013885

APPLICANT:  Ms Hesser

OTHER PARTIES:  Child Support Registrar

Mr Packard

TRIBUNAL:Member M Kennedy

DECISION DATE:  30 October 2018

DECISION:

The Tribunal sets aside the decision under review and, in substitution, decides that from 26 February 2018 until the end of the case in respect of both children, Mr Packard’s annual rate of child support is nil.

CATCHWORDS

CHILD SUPPORT– departure determination – income, property and financial resources of parents – costs of education for the child – decision to depart – decision under review set aside and substituted

Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been removed from this decision and replaced with generic information so as not to identify involved individuals as required by subsections 16(2AB)-16(2AC) of the Child Support (Registration and Collection) Act 1988.

REASONS FOR DECISION

1. Mr Packard and Ms Hesser are the parents of [Child 1] (14)  and [Child 2] (11).  The children are in the shared care of their parents.

2. A child support assessment is in force in respect of the children.  Under that child support assessment, Mr Packard is assessed to pay an annual rate of child support of $8,196pa (from 1 August 2018).  The assessment is calculated under the administrative provisions of the child support scheme and uses Mr Packard’s provisional adjusted taxable income of $87,360 (based on 2016/2017 adjusted taxable income of $85,396) and Ms Hesser’s 2017-2018 adjusted taxable income of $150.  Previous recent assessments have had a similar outcome, although Ms Hesser’s taxable income has reduced markedly from $16,320 in 2016/2017, and $24,480 in both 2014/2015 and 2015/2016.

3. Mr Packard and Ms Hesser have lodged applications to depart from the administrative assessment, objections and an application for review in the Tribunal previously.  Most recently, the Tribunal had set aside a departure determination made by an objections officer and reinstated the administrative assessment of child support: 8 September 2017 in matters AC010347 and AC010432.

4. Mr Packard lodged a new application for a change of assessment just over two weeks later on 27 September 2017, and Ms Hesser cross applied as soon as she was made aware of the application.  In its decision of 8 September 2017 the Tribunal had declined to deal with circumstances relating to school fees that had arisen since the earlier application for a change of assessment had been made.

5. On 13 December 2017, the Child Support Registrar found grounds established and departed from the administrative assessment so as to effectively decrease Mr Packard’s liability to pay child support by $1,276pa for the period 1 December 2017 to 30 November 2018.  Both parties objected on 21 January 2018 (Mr Packard) and 24 January 2018 (Ms Hesser).

6. The objection officer decided on 21 March 2018 that the ground known as Reason 3 was established in respect of out of pocket expenses incurred by Mr Packard for educational expenses only, but found that fixed costs of private education were addressed in the terms of a consent order made in the Federal Circuit Court [in] November 2016.  The objection officer also found that Ms Hesser had a relevant financial resource available to her in the form of support from her parents.  The objection officer rejected both parties’ claims that the other party’s earning capacity rendered the assessment unfair.  Although not raised expressly by Ms Hesser, the objection officer found the ground known as Reason 2 was established in relation to tutoring expenses incurred for [Child 2].

7. The objection officer however decided that despite finding grounds established, it would not be just and equitable to change the child support assessment, noting the similarity in expenditure Mr Packard had incurred out of pocket, with the expenditure Ms Hesser had incurred for [Child 2’s] tutoring.

8. The objection officer therefore set aside the Registrar’s decision to depart from the administrative assessment, and substituted a decision to refuse the change of assessment applications.

9. Both Mr Packard and Ms Hesser applied to the Tribunal for review on 16 April and 9 April 2018 respectively.

10. As took place in the previous Tribunal review, arrangements were made for the review to take place on the papers.  Ms Hesser is resistant to participating in a hearing with Mr Packard present, including by telephone, and relies on a medical condition in that regard.

11.  In this case however, Mr Packard exercised his right, which I had preserved for both parties in the arrangements for the hearing to proceed on the papers, to make oral submissions before the Tribunal if he ultimately wished to do so.  In response, Ms Hesser engaged a solicitor to monitor the proceedings in which Mr Packard made his submissions but did not attend the hearing herself.  Those proceedings took place on 29 October 2018.  Ms Hesser did not attend or participate in the hearing, but [Mr A] of [Company 1] attended the hearing on her behalf, but did not make submissions.

12.  I refer to the Tribunal’s directions made on 16 July 2018 in the event that it is necessary to consider further the procedure adopted in this review.

ISSUES

1. The legislation relevant to this review is contained in the Child Support (Assessment) Act 1989 (the Act) and in the Child Support (Registration and Collection) Act 1988. The rate of child support payable by a liable parent is usually based on an administrative assessment under Part 5 of the Act. This requires the application of a statutory formula which takes into account factors such as the number and age of children, the level of care provided and the income of each parent.

2. Under section 98B of the Act, if special circumstances exist, a liable parent or a carer entitled to child support may apply to the Registrar in writing, requesting a departure from the administrative assessment in relation to a child.

3. Under section 98C of the Act, before making a departure determination on an application made under section 98B of the Act, the Registrar must be satisfied that in the special circumstances of the case, one or more grounds under subsection 117(2) of the Act exist, and that it would be just and equitable and otherwise proper to make a particular determination.

4. The issues for me to determine in this case are therefore:

   ·       Whether one or more of the grounds for departure referred to in subsection 117(2) of the Act exists; and, if so (and only if so),

   ·       Whether it would be just and equitable as regards the child, the liable parent and the carer entitled to child support, and otherwise proper, to make a particular determination to depart from the administrative assessment of child support.

CONSIDERATION

Is there a ground to depart from the administrative assessment of child support?

1. I turn first to consider the ground known as ‘Reason 3’.  In this regard, subsection 117(2)(b)(ii) provides that a ground is established if in the special circumstances of the case, the costs of maintaining the child are significantly affected because the child is being cared for, educated or trained in the manner that was expected by his or her parents.

2. It does not appear to be in dispute that both parents expect the children to be privately educated.  Indeed, my consideration of this issue requires focus on orders made in the Federal Circuit Court [in] November 2016, by consent, that makes provision for the [children] to be educated at [a named] College until the completion of their secondary education.

3. I am satisfied on the basis of the consent orders that the children are being educated in the manner expected by their parents. The issue in this case however is whether the costs are significantly affected in the special circumstances of the case.  The orders of the Federal Circuit Court that I rely upon in relation to the expectation of the parents, introduce a level of complexity in assessing the child support consequences of that expectation.

4. The orders contain a preliminary notation to the effect that ‘the father will not on account of the payment of school fees make an application to vary the current Child Support Assessment’.  The objection officer considered that this notation foreclosed on incorporating the direct costs of private education in a change of assessment determination, correctly noting it is not the role of the department to subvert or circumvent the intention of court or consent orders.  This is why the objection officer found the ground established only with respect to other out of pocket educational expenses.

5. However, in transcribing the notation, the objection officer may have overlooked the word ‘current’ in the notation.  The notion of what is meant by the ‘current’ child support assessment is unclear.  I interpret the reference to mean the ‘current’ child support assessment for the child support period existing at the time the orders were made, and therefore the notation does not in its terms apply to subsequent assessments of child support.  If I am wrong in this regard, all my reasoning that follows is affected by a fundamental misapprehension of what was provided for in the orders.  I agree that neither the Department nor the Tribunal is to subvert or circumvent orders of this nature, and even thought the text appears merely in a notation it would be important to give effect to that notation. I have interpreted the orders as best I can in this regard.

6. As mentioned to Mr Packard at the hearing however, a more fundamental concern arises in respect of potentially disregarding the court orders not in relation to the notation but in understanding the substance of the orders actually made, and in particular three orders addressing costs associated with private education.

7. As written, the orders of [November] 2016 appear to make thorough and complete provision for the costs associated with private education and would leave little room for a departure determination to be made in that regard without contradicting those orders.  Specifically, orders 12,13 and 14 provide for:

   -Ms Hesser to apply for a school card discount each year;

   -Mr Packard to pay the difference between the [fees] and the school card discount; and

   -Other educational costs to be shared equally.

8. Mr Packard contends that the orders ought not be understood only by reference to the words used in the order, but by reference to his case before the Court, the remarks made in a judgment of [Judge A] and earlier orders made by [Judge B] [in] April 2015 which set out a completely different scheme for meeting the costs of private education at [the named] College in the event that the children were to be schooled there. In this regard, Mr Packard explained that the orders were poorly phrased and had been prepared in a rush. 

9. Mr Packard drew my attention to an extract of transcript from proceedings before [Judge A] on 24 September 2017 where this very issue was touched upon in the context of child support, but it is clear that the Court was fully occupied on that occasion in dealing with a dispute about parenting matters, and the effect of the notation and orders 12,13 and 14 was not clarified at that time. Mr Packard added, in response to my question, he has been unable to afford returning to court to apply to have the orders amended and is concerned about delays in the Federal Circuit Court in that regard.  It is, in my view, vastly more desirable for parties to apply to the court to clarify and address issues arising out of its orders in these circumstances than for the Tribunal to be asked to go behind them by reference to extraneous material.

10. I have nonetheless followed with care Mr Packard’s explanation as to why orders 12,13 and 14 of [November] 2016 sit uncomfortably with previous orders made in relation to the costs of private education and may not reflect what was intended by the parties or the court.  I accept that Mr Packard has reasonable grounds for arguing that the orders do not reflect previous arrangements, possibly did not reflect his intentions in consenting to the orders, and I agree his case in this regard rises higher than a mere retrospective regret about orders that were made.  However, in terms of relying on the terms of earlier orders made in relation to this issue, Mr Packard faces a fundamental problem in that the orders he relies upon were expressly discharged by [Judge A] [in] November 2016. The earlier orders cannot carry much interpretive weight in these circumstances, and certainly do not carry so much interpretive weight such that the terms of the earlier orders can substitute for the contradictory terms of the later orders.  I agree with the objection officer in the sense that the orders simply mean what they state.  I interpret the orders accordingly.

11. Ms Hesser submits that the orders expressly provide for her to be indemnified against the costs of the school fees, and I note that is part of order 13, albeit not a complete representation of what the order provides for.

12. I reject Mr Packard’s contention that the orders of [November] 2016 mean anything other than what they say. In relation to what they say, the orders purport to set out a complete code as to how the costs associated with the children’s education are to be met.  While I consider that neither the notation nor the orders prevents a change of assessment application being made in respect of reason 3, if the orders can be applied there is little scope for a departure determination to be made that does not directly or indirectly conflict with the orders.  In such circumstances, I consider that the circumstances would not be special so as to establish the ground in subsection 117(2)(b)(ii) of the Act.

13. However, matters have been pointed out by Mr Packard that show that as a code, orders 12, 13 and 14 simply no longer function.  In this regard, order 12 obliges Ms Hesser to apply each year for a school card, and Mr Packard’s obligation to pay school fees is then calculated on an assumption that the school card is granted.  The orders make no provision for circumstances where Ms Hesser does not apply for the school card, or if the school card is not granted. 

14. It appears that Ms Hesser has either not applied for the school card, or the card has not been granted.  At C429 and C431 solicitors for Ms Hesser write to Mr Packard’s solicitors pointing out that she may not be eligible for the school card discount, including information from the Department of Education to that effect.  I do not know if the eligibility was tested or not.  Ms Hesser was obliged by order 12 of [November] 2016 to test her eligibility through making an application.  I am however satisfied that a school card discount has not been applied to the liability for tuition fees having regard to amounts paid by Mr Packard for tuition in 2018 (C450).  As such, the orders are simply incapable of application.  The premise of the code for arranging payment of school fees established by orders 12, 13 and 14 is no longer present.

15. Mr Packard has made payments towards tuition for his [children] of $15,413.78 in 2018. He has done so alone. This is a very significant amount, well in excess of the child support assessment itself.  I note Mr Packard explained that he has taken on debt to his parents to meet that cost.  I consider this amount significantly affects the costs of maintaining the children.

16. In circumstances where provision made in the court orders for dealing with the costs associated with private education no longer is capable of operating, and where I am satisfied that the notation on those orders do not purport to prevent an application for a change of assessment being made in respect of the child support assessment in force at the time of Mr Packard’s application (or now), I am further satisfied that special circumstances are present, and the ground is established.

A just, equitable and otherwise proper departure from the administrative assessment of child support

1. As I am satisfied that there is at least one ground to depart from the administrative assessment of child support, the next step is to consider whether it is just and equitable to depart from the assessment.  In deciding whether it is just and equitable, the Tribunal must have regard to the following matters set out in subsection 117(4) of the Act:

   (a)      the nature of the duty of a parent to maintain a child (as stated in section 3); and

   (b)      the proper needs of the child; and

   (c)      the income, earning capacity, property and financial resources of the child; and

   (d) the income, property and financial resources of each parent who is a party to the proceeding; and

   (da)    the earning capacity of each parent who is a party to the proceeding; and

   (e)the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:

   (i)       himself or herself; or

   (ii)       any other child or another person that the person has a duty to maintain;

   and

   (f)the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and

   (g)any hardship that would be caused:

   (i)       to:

   (A) the child; or

   (B) the carer entitled to child support;

   by the making of, or the refusal to make, the order; and

   (ii)        to:

   (A) the liable parent; or

   (B) any other child or another person that the liable parent has a duty to support;

   by the making of, or the refusal to make, the order; and

   (iii)to any resident child of the parent (see subsection (10)) by the making of, or the refusal to make, the order.

2. A perpetual issue in the conflict between Mr Packard and Ms Hesser has been the question of the income, property and financial resources or each parent, and so I will turn my mind to that factor first.

3. The question of Ms Hesser’s financial resources is vexed.  A review of decisions made both in the family law and child support context demonstrates that Ms Hesser benefits from the support of an apparently wealthy family.  The court appears to have viewed this support, in all the circumstances, as a financial resource.

4. Ms Hesser has previously declared in financial statements that she received income from a trust controlled by her parents, and declared expenditure in excess of her income: for example, see paragraphs 304 to 306 of the judgment of [Judge B] at C533, paragraphs 59 to 63 of the decision of Senior Member Harvey at C131, and most comprehensively by [Judge A] at paragraphs 23 to 26 of a judgment delivered [in] November 2017 at B51 and B53 in the context of awarding costs against Ms Hesser for bringing an unmeritorious application in relation to parenting matters.

5. His Honour notes that he was told Ms Hesser is a discretionary beneficiary of a discretionary trust operated by her parents (the Hesser Family Trust – hereafter the Trust). In 2015, Ms Hesser was paid $1900-odd after tax for work managing a [specified] project. Ms Hesser’s parents had paid legal expenses on behalf of Ms Hesser in the order of $150,000 to $180,000, said to have been advanced as a loan. His Honour described Ms Hesser’s ‘financial circumstances’, a term he selected with care by reference to paragraph 117(2A)(a) [of the Family Law Act ] as a person ‘with minimal income but with significant financial resources behind her if the occasion demands’.

6. As mentioned, this situation has also been recognised by this Tribunal as previously constituted.   The Tribunal had found that the support received from the Ttrust and/or her parents was of a kind that reduced or removed expenses that Ms Hesser would otherwise need to meet from her own resources.

7. There is no cogent basis in the material before me upon which I can quantify or value the financial resource that has been recognised to exist by the courts and the Tribunal previously.  Mr Packard contended that there are exceptional difficulties in this case in arriving at a cogent financial picture in relation to Ms Hesser.

1. Mr Packard points to a document at C627 that appears to be a privacy statement attached to documentation prepared for the provision of a financial product from [a named bank] to the Trust, signed by Ms Hesser and others.  The document described an application having been made for a credit facility by the Trust for ‘repayment of beneficiary loan account and associated personal litigation funding’.  I can draw no useful inferences from this evidence, indeed the proposition that the Trust has applied to take out a loan to repay a loan from a beneficiary, if indeed that is what has happened, doesn’t make much sense in isolation.

2. The documentary evidence provided by Ms Hesser as to her financial circumstances and the circumstances of the financial benefit she has received from the Trust is unreliable in my assessment, with significant inconsistency and unexplained developments.  At T193, Ms Hesser identifies a liability to her parents for a loan of $7.5million, but there is no corroborating documentary evidence to support a financial transaction of this magnitude.  It seems unlikely and has not been repeated in subsequent financial statements.  The Tribunal as previously constituted states that Ms Hesser had identified in those proceedings a liability of either $450,000 for loans and legal fees.  The figure is $500,000 in the statement of financial circumstances lodged in these proceedings.

3. Also, the Tribunal’s previous consideration of Ms Hesser’s income proceeded on the basis that she earned income from the Trust, and Ms Hesser has previously provided evidence supporting a contractual arrangement between herself and the Trust to be paid for [a specified project] at the rate of $1914 per month (T154).  However, the statement of financial circumstances provided by Ms Hesser for this review (A1) identifies no income other than family assistance and child support without any corresponding explanation as to what happened with her previous employment with the Trust, if indeed one were to accept that an employer–employee or contractual relationship genuinely existed.

4. Finally, Mr Packard has pointed to receipts contained within the Tribunal papers relied upon by Ms Hesser to demonstrate payment of out of pocket school expenses and tutoring fees for the purpose of these proceedings, but the receipts show either that that Ms Hesser’s parents have made the payment (T585) or the identifying details for the account from which payments have been made have been removed: (T567 and T589).  In my view, this evidence further supports the observations made by the courts and the Tribunal as previously constituted to the effect that while Ms Hesser may have minimal income, she has access to significant financial resources behind her if the occasion demands.

5. Ultimately, any attempt by me to quantify or measure the financial resources available to Ms Hesser from her parents or the Trust is futile.  My finding must be reached therefore in very general terms.  I find that Ms Hesser has access to significant financial resources from the trust if occasion demands.  The nature of the financial resource is not quantifiable on the evidence before me.

6. I refer to subsection 117(7A) of the Act.  In having regard to the financial resources of a parent of a child, I must disregard the income, earning capacity, property and financial resources of any person who does not have a duty to maintain the child…unless in the special circumstances of the case I consider it is appropriate to have regard to them.  Having regard to the discretionary nature of the Trust, and I accept Ms Hesser does not exercise direct legal control over the Trust, it may be the case that he financial resources  held within the Trust are not in fact the financial resources of Ms Hesser but of persons who do not have a legal duty to maintain the children.  However, for the reasons set out above, I consider that in the special circumstances of this case it is appropriate to have regard to those financial resources.  There is evidence before me of long term reliance on those financial resources and a lack of cogency generally as to the evidence of Ms Hesser’s financial circumstances.  These are the special circumstances I find justify having regard to the financial resources available to Ms Hesser through the Trust.

7. During the hearing, Mr Packard raised the issue of Ms Hesser’s earning capacity, pointing to the absence of income being received from what has previously been characterised as a contractual or employment relationship between Ms Hesser and the Trust.  Although I have followed Mr Packard’s arguments in this regard, I do not view this as an earning capacity issue but it is more aptly considered in the context of considering financial resources.

8. Finally, I have considered Ms Hesser’s income. Ms Hesser has provided evidence that she is in receipt of parenting payment (A14) with effect from 27 June 2018. Subparagraph 117(7A)(b)(ii) of the Act obliges me to disregard Ms Hesser’s entitlement to an income tested pension. Ms Hesser relies on the grant of parenting payment as demonstrating that Centrelink accepts she has neither control nor was the source of funds held within the Trust. While I accept that the grant of the payment is consistent with Centrelink forming that view under Part 3.18 of the Social Security Act 1991, it is not a conclusive assessment for child support purposes and not inconsistent with my view that the Trust represents a financial resource either of Ms Hesser or of another person that is nonetheless to be taken into account in the special circumstances of the case.

9. As to Mr Packard’s income, financial resources and earning capacity, Ms Hesser has taken issue with Mr Packard’s use of purchased leave.  On the evidence before me, little has changed in relation to Mr Packard’s use of purchased leave from when that issue was previously considered by the Tribunal. 

10. On that occasion, the Tribunal considered the issue against the pre-requisites for taking into account earning capacity as provided for at subsection 117(7B) of the Act.  The Tribunal found that Mr Packard’s decision to reduce his working hours through the use of purchased leave was justified by his responsibility to provide care for his [children] (50%).  I agree that Mr Packard’s parenting responsibility justifies his choice to make use of purchase leave.  Furthermore, I accept that there is medical justification on the evidence before me at T253 for Mr Packard’s decision to take purchased leave.

11. In relation to other salary sacrifice amounts that have been raised by Ms Hesser and considered by the Tribunal previously, I accept on the basis of Mr Packard’s payslip that he no longer participates in salary sacrifice.

12. Finally, I note that despite Mr Packard’s evidence that he was facing financial hardship, he had elected to make payment of his [children’s] school fees in a lump sum.  In response to my questions, Mr Packard explained that he achieved this by borrowing money from his parents.  Mr Packard took me to the evidence of his payslip where it shows that his salary is paid in part to a different bank account. Mr Packard explained this is the arrangement he has with his father for the payment of the loan that was extended to meet the school fees.  I accept Mr Packard’ evidence in this regard.

13. I consider that Mr Packard’s income, property and financial resources, and his capacity to provide financial support for his children is otherwise adequately reflected by his adjusted taxable income, which I note is $85,396 in 2016 and 2017.

14. I turn to consider the other factors in subsection 117(4) of the Act.

15. There is no evidence before me that the children have an independent source of support, and I proceed on the basis that they rely on the support of their parents.

16. As to the commitments of each parent who is a party to the proceedings for their own self-support, I have taken into account the statement of financial circumstances each has lodged with the Tribunal.

17. Mr Packard’s statement is detailed and plausible both as to weekly expenses for himself and for the children when in his care.  His weekly household expenses are less than his weekly income (albeit before tax) from employment and family assistance.  I accept that after tax and after meeting the child support liability as assessed the gap is reduced or reversed.  No aspect of expenditure by Mr Packard for his own self support was brought to my attention as unusual.

18. Ms Hesser’s statement of financial circumstances is vague and implausible.  She reports income of nil other than child support and family assistance, but has subsequently provided evidence of grant of parenting payment.  Ms Hesser’s listed expenses do not include an amount for food or rent, and she states she has had to reduce all her expenses to fit in with  her current income.   Mr Packard points to social media evidence in the Tribunal papers  inconsistent with such a proposition.  Ms Hesser states that she relies on charity to keep basic standards in place.  I place little weight on this statement and proceed to make my decision largely uninformed about Ms Hesser’s self-support expenses or how she meets her daily living expenses and the expenses incurred in providing care for the children. I also take into account in this regard the findings I have set out above regarding Ms Hesser’s ability to access financial resources from other sources, and the evidence indicating that third parties may be meeting particular expenses she has relied upon.

19. I have taken into account the proper needs of the children.  In this regard, it was accepted by the objection officer that [Child 2] was in need of specialist tutoring and this cost was met by Ms Hesser.

20. Mr Packard accepts that [Child 2] has a special need for extra tutoring, and this is supported by expert evidence in the Tribunal papers.  Mr Packard disputes that Ms Hesser has met the cost, or indeed that the cost is a continuing one.  The current evidence is limited to a report from a [tutor] of July 2018 that suggests that the tutoring was continuing at that point in time.  Ms Hesser has not provided any evidence of current ongoing costs in relation to meeting this need.

21. As mentioned above, the evidence of payments being made are in the form of transactions listed on bank statements that have had any identifying details removed.  I am not satisfied that the statements at T567 demonstrate that Ms Hesser was meeting those costs. 

22. At the hearing, Mr Packard made extensive submissions addressing comparative hardship between the parents.  In this regard, I am to take into account any hardship that would be caused to the child or the carer entitled to child support and to the liable parent by the making of, or the refusal to make, the order.

23. I have had regard to Ms Hesser’s statement to the effect that she is reliant on charity, but as mentioned above I place limited weight on this statement.  Similarly, I take into account my findings as to financial resources and in particular my findings that Ms Hesser has access to significant financial resources behind her if the occasion demands.

24. Mr Packard is in well-paid and secure professional employment.  Mr Packard submits that he lives frugally, but the child support assessment in addition to the private school fees place him into financial hardship.  He says he does not have access to a wealthy family structure, and so the balance of hardship lies on him.

25. On the basis of my findings as to Ms Hesser’s access to financial resources, I do not consider that she will face any particular hardship by a reduction in the assessed rate of child support to be paid by Mr Packard.

26. My key findings in this review are essentially that the costs of maintaining the children are significantly affected by the mutual expectation of the parents as to their private education.  In this regard, I have also found that Mr Packard has exclusively met that significant cost from February 2018 onwards by making payments well in excess of the corresponding child support assessment.  I accept that this financial burden places significant hardship on him, notwithstanding that Mr Packard earns a relatively high income from his employment.

27. Against this, I have found that Ms Hesser’s financial circumstances are opaque and no cogent picture is presented.  I am however satisfied as others have been that the Trust provides Ms Hesser with significant financial resources if the occasion demands, notwithstanding I am unable to quantify the value of those resources.

28. In all the circumstances, and on the assumption that Mr Packard will continue to meet the private tuition fees exclusively as he has done from 2018, I consider that a just and equitable departure from the administrative assessment of child support would be to reduce Mr Packard’s annual rate of child support to nil with effect from 26 February 2018 to coincide with his payment of the entire tuition fees for the children.

29. I justify this decision by noting that the school fees paid by Mr Packard, if it were assumed that Ms Hesser should contribute equally to fees of that nature incorporate an amount in excess of the child support assessment calculated on the basis of the taxable income of each parent.  I consider it unjust and inequitable to expect Mr Packard to pay the full school fees in addition to an annual rate of child support calculated without regard to the financial resources I have found to be available to Ms Hesser.  I also take into account that care iof the children is shared/

30. I consider it would be artificial and non-intuitive to attempt to manipulate components of the child support formula on the basis that the financial resources available to Ms Hesser are capable of quantification.   For the reasons set out above, the financial resource is not amenable to be dealt with in that way.  I consider it more logical, reasonable, just and equitable to recognise the significant financial burden Mr Packard carries in meeting the tuition fees for the children ( in excess of the administrative assessment of child support in any event) so they may be educated in the manner expected by the parents and to proceed on the basis that Ms Hesser’s need for child support from Mr Packard is not so clear as to outweigh the hardship encountered by Mr Packard in meeting the school tuition fees and the child support assessment.  It follows in my view that the appropriate response is to reduce the assessed rate of child support to nil.

31. I consider that consistent with the basis of my reasoning, this departure should commence from the time that Mr Packard commenced paying the private school tuition fees for the children.

32. As to the end date of the departure determination, I have taken into account that the parties have litigated on multiple occasions in the Federal Circuit Court, and have brought child support matters to the Tribunal on multiple occasions.  Both parties are no doubt adversely affected by the continuing conflict.

33. It appears that the care arrangements for the children are stable.  Mr Packard’s financial situation and income appears stable, and his obligation to incur the significant expense for private education appears likely to continue.

34. My conclusions in relation to Ms Hesser’s financial circumstances are not conclusions that can foreseeably be changed by future events.

35. Importantly, I am also mindful that the child support scheme envisages that in the event of changed circumstances, either parent can apply for a subsequent change of assessment: section 98J of the Act.  This may be applicable, for example, if Mr Packard was no longer meeting the private school tuition expenses exclusively.  The existence of this mechanism reassures me that I may attempt to provide a complete answer to this dispute between the parents without the result becoming unjust and inequitable through future changed circumstances.

36. Having regard to all these matters I have decided to maintain this departure determination through to the end of the child support case in respect of both [Child 1] and [Child 2].  I consider that a departure determination of this nature is just and equitable on the evidence before me.

37. I have taken into account that at all material times both Mr Packard and Mrs Hesser have been in receipt of family assistance from the Commonwealth Government.  I understand Mr Packard has calculated that he is on the threshold of not being entitled to such a payment if for example he were to reduce his reliance on purchased leave, which may be a consequence of an easing of the various pressures he faces. 

38. I am also conscious that if Ms Hesser maintains entitlement to parenting payment, she will continue to be entitled to family assistance, and the rate of family assistance is subject to maintenance income test.  It is likely that the departure determination I am considering will increase Ms Hesser’s entitlement to family assistance as the current child support assessment is in excess of the maintenance income free area and thus Ms Hesser’s rate of family assistance in excess of the base rate is reduce in proportion. 

39. While this outcome is undesirable, as it tends to increase the financial responsibility on raising the children from their parents to the taxpayer, I have decided that on balance the determination remains otherwise proper, placing greater weight on my finding that Mr Packard faces significant financial hardship in meeting both a child support assessment based on the administrative assessment and meeting the private tuition expenses.

40. I have therefore decided that it is just, equitable and otherwise proper to make a determination varying the annual rate of child support payable by Mr Packard to nil from 26 February 2018 to the end of both child support cases.

DECISION

The Tribunal sets aside the decision under review and, in substitution, decides that from 15 February 2018 until the end of the case in respect of both children, Mr Packard’s annual rate of child support is nil.